If you are using your buy and hold properties as short term rentals, through a company like Airbnb, you may be required to pay an additional 15.3% self-employment tax. Although it may seem like a gray area to you, the IRS considers it an active business and will take note of which schedule you are filing. Short term rentals require more of your labor and your time, which rarely gets accounted for when calculating costs. Considering all the aspects of short term rentals versus long-term buy and hold properties will shield you from future surprises.

Key Takeaways:

[2:34] Airbnb investors are running an active business, so the IRS imposes a 15.3% tax on the income.

[6:38] Maintenance on Airbnb properties are more time and labor intensive than a buy and hold property.